Day Traders Diary

1/17/20

The major averages wrapped up a solid weekly performance with new record levels, strong global economic data and a solid start to the earnings season. The Dow Jones Industrial Average closed up 50 points or 0.2% at 29,348. The S&P 500 climbed 0.4% to 3,329 while the Nasdaq Composite advanced 0.3% to end at 9,388. The major averages all hit record highs on Friday.

Friday's gains came after Chinese industrial data for December topped expectations overnight, with production rising 6.9% on a year-over-year basis. The overall Chinese economy grew by 6.1% in 2019, matching expectations. To be sure, that is also the slowest growth rate for the Chinese economy since 1990.

In the U.S., housing starts soared nearly 17% in December and reached a 13-year high. That data follows Thursday's release of better-than-forecast weekly jobless claims and strong business activity numbers from the Philadelphia Federal Reserve.

For the week, the S&P 500 climbed nearly 2% while the Dow advanced 1.8%. The Nasdaq finished the week up 2.3%. Those gains built on the massive stock surge from 2019 and added to this year's strong start. The S&P 500 and Dow are up 3.1% and 2.8%, respectively, year to date. The Nasdaq has bolted more than 4.5% higher in 2020.

Separately, Alphabet rose 2% and Apple rose a percent benefitting from a pair of positive analyst recommendations. UBS raised its Google price to $1675 while Morgan Stanley raised its Apple target to $368.

Even with the averages at new highs a number of stocks were lower. Boeing fell 2% extending its losses on a report of another software issue, and several transportation stocks fell after issuing relatively disappointing earnings results and/or guidance. Expeditors International fell 5%, J.B. Hunt fell 4% and CSX was lower on a downgrade. KC Southern rose 3% even as they missed earnings.

U.S. Treasuries finished mixed amid some curve-steepening activity. The 2-yr yield declined one basis point to 1.56%, while the 10-yr yield increased three basis points to 1.84%. The U.S. Dollar Index increased 0.3% to 97.62. WTI crude increased 0.1% $58.55/bbl.